The federal government form for applying for health coverage is photographed in Washington, Wednesday, Sept. 11, 2013. (AP Photo/J. David Ake) / AP

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Gannett Wisconsin Media

Special report

The Affordable Care Act will touch nearly every American. As key parts of the complex law begin to take effect, Gannett Wisconsin Media is launching a special in-depth series of stories examining the most important issues for consumers. The series, “Health Care Reform & You,” will focus on helping you understand what you need to do, how to do it and how to get help. Installments in the series mostly will appear on Sundays and Mondays, but we’ll also report on related news developments as they happen. COMING MONDAY: How to protect yourself from scammers.

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In two weeks, the centerpiece of President Obama’s comprehensive health reform law — the Affordable Care Act — begins to take shape in Wisconsin and across the U.S.

On Oct. 1, state-by-state exchanges — websites where you can buy health insurance — become available and participants will have several months to make a decision. In the end, you will be required to have health insurance or pay a tax penalty.

If you get health insurance through your employer, it will be a non-event. But for the uninsured — 173,800 in the state, according to advocacy group Citizen Action of Wisconsin — and the 90,000 people who will be bounced from Wisconsin’s BadgerCare Plus Medicaid program, the event will be momentous.

The new federal law — perhaps the most complex national legislation in a lifetime — confuses even health care experts at times. It will require much effort to understand and navigate and it will be difficult to ignore.

“The biggest confusion has to do with the low level of knowledge about ACA,” said Karen Pollitz, senior fellow at the Kaiser Family Foundation, a private, nonprofit group that studies major health care issues. “They know something is coming, but don’t know how it works. It will require extra effort.”

The insurance mandate and exchanges are controversial. Twenty-seven states, including Wisconsin, opted not to participate in the establishment of exchanges, leaving the task to the U.S. Department of Health and Human Services. Republican Gov. Scott Walker strongly opposes the Affordable Care Act, also known as ObamaCare.

Wisconsin’s insurance department said it will not release the complete cost of the plans before Oct. 1. Democrats and health care reform supporters say it’s because Republicans are trying to dampen participation. The state insurance department, which did release broad examples of the costs earlier month, says it’s because of state filing deadlines and others factors.

Consumers can buy insurance through the exchanges from Oct. 1 to March 31. If they want coverage to begin Jan. 1, the earliest date, they have to make their purchase by Dec. 15. Otherwise, coverage generally will take effect on the first of the month after the purchase. People who do not buy insurance through the exchanges or private market by March 31 will have to wait until October 2014 to apply for coverage starting in 2015. Exceptions will be made for events such as births, deaths, job changes, income changes or relocations.

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“People don’t need to feel pressure to make a decision on Oct. 1,” Pollitz said.

Plan types, costs

Health insurance plans will be available on five levels: catastrophic (available mostly to single people under age 30), bronze, silver, gold and platinum. All exchanges will offer bronze and silver plans. Not all will offer gold and platinum. The differences in plans primarily are the level of benefits or, in other words, out-of-pocket costs. The more out-of-pocket expense the consumer pays, the lower the premium.

Premiums — the amount you pay monthly for health insurance — are determined by a process called modified community rating.

Insurance companies set premium prices by estimating how much plans will cost, and then are allowed to modify those estimates based on other factors. The Affordable Care Act reduces the factors they can use to individual or family coverage, location — there are 16 geographic areas in Wisconsin — age and tobacco use.

The difference in cost between lowest and highest rates cannot exceed a 3-1 ratio. In general, it means healthy people will pay more for insurance than they do now, while older and less-healthy people will pay less. Because of the elimination of gender as a rating factor, young men in their 20s likely will see the largest rate increases.

The Kaiser foundation analyzed premiums in the District of Columbia and the 17 states, not including Wisconsin, that made them available. It calculated that the average premium for a 40-year-old in the second-lowest-cost silver plan offered in each state would be $320 a month before subsidies.

Subsidies will be available to individuals and families making from 100 percent to 400 percent of the federal poverty level. Generally, that means individuals earning $11,490 to $45,960 a year and a family of four earning $23,550 to $94,200 a year. Subsidies will be based on 2014 income, so people will have to estimate what they will earn.

The amount of the tax credit, or subsidy, is based on the cost of the second-lowest-cost silver plan in the area where a person lives. The tax credit equals that benchmark premium minus what the individual is expected to pay based on their family income, which is calculated on a sliding scale from 2 percent to 9.5 percent of income.

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After applying the subsidy in its example, Kasier determined the cost would be $193 a month in all markets for that silver plan. Subsidies can be applied to any of the available plans in the exchange.

Dr. Johnathan Gruber, health economist at the Massachusetts Institute of Technology, said 57 percent of people in the exchanges will get subsidies.

Subsidies can be taken in two ways: immediately or as a credit on tax returns. If taken immediately, the money will be sent directly to the insurance company, and consumers will be required to repay some of that money if their income status improves during the year.

Individuals who are not insured in 2014 will be charged a penalty. For 2014, the penalty is $95 or 1 percent of taxable gross income, whichever is greater. It is half that for a child and up to $285 for a family. Penalties increase in following years, up to $695 per year or 2.5 percent of taxable gross income for an individual and $2,085 for a family of four by 2016.

Individuals do not have to buy insurance through the exchanges. Companies offering insurance through the exchanges must offer the same plans in the private market at the same price, or other plans. But coverage must be bought through the exchange to receive federal subsidies.

All individual coverage will be guaranteed, as it has been in the small group markets for more than a decade. That means individuals cannot be turned away for any reason except fraud.

In determining which plan to buy, consumers will want to balance premium costs, subsidies, possible out-of-pocket expenses, networks and quality of care.

“Affordability, in many cases, is in the eye of the beholder,” said Larry Levitt, senior vice president for special initiatives at Kaiser. “People will want to carefully consider their options and look at the tradeoffs involved.”

Help available

Consumers will get help in using the online exchanges from a variety of sources. Among the approved helpers are so-called navigators, certified application counselors, licensed insurance agents and brokers, and community health centers.

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In Wisconsin, six organizations received federal grants to train navigators. The closest in northeastern Wisconsin, so far, is Partners for Community Development Inc. in Sheboygan.

“The U.S. Department of Health Services folks are meeting with the regional enrollment networks and they are trying to get as many folks involved as they can and get everybody connected together inside each of these regions,” said J.P. Wieske, legislative liaison for the state Office of the Commissioner of Insurance.

Wieske said information eventually will be available at the healthcare.gov website, at the state insurance department website (oci.wi.gov) and possibly from some local organizations.

“I think they will be all over the place making themselves known,” he said.

Assistance from navigators, counselors and others who are not licensed insurance agents and brokers is limited to helping consumers find their way through the online system. They can show people how to push the buttons, not which buttons to push.

Licensed insurance agents and brokers are allowed to advise people on which coverage would be best for them.